MIAMI—Suzanne M. Amaducci-Adams, partner with Bilzin Sumberg Baena Price & Axelrod and leads the firm's hospitality group, has her finger on the pulse of hotel deals happening in Miami and Miami Beach’s hot hospitality market. Indeed, at a time when everybody seems to want to own a piece of Miami commercial real estate, Amaducci-Adams can tell you who’s getting financing, what is fueling the demand for hotels, and the latest trend involving boutique hotels in South Beach.
GlobeSt.com caught up with Amaducci-Adams to get her take on the market in part one of this exclusive two-part interview. Be sure to come back this afternoon for part two, where she will talk about the New York-Miami Beach connection.
GlobeSt.com: In the last six months, we have seen a growing number of hotels being refinanced. What kind of criteria lenders are looking for?
Amaducci-Adams: First and foremost, a lender wants to see a strong historical operating performance. Any hotel that has consistently performed well during the downturn will be looked upon favorably. After the operating performance, lenders look at the strength of the sponsor, management expertise, brand location—at a time when top tier markets are still preferred—cash flow and low leverage. They are all very important factors.
GlobeSt.com: We are seeing a tremendous amount of hotel activity in Miami, especially Miami Beach. What is fueling it?
Amaducci-Adams: Miami and Miami Beach have really become popular destinations but for different reasons for different people. For investors, Miami is consistently one of the top five hospitality markets in the country for the three keys business metrics: ADR (Average Daily Rate), occupancy and RevPar (Revenue Per Available Room.) Miami has achieved a number one rating several times this year already.
For foreign investors, Miami is part of the U.S. and is viewed as a "safe" place in which to invest. For customers --tourists and business people alike-- it is a destination. Miami has the arts, fine restaurants, signature events, world class shopping, sophisticated business investments and opportunities and favorable state income tax treatment. Miami is also becoming a center for international arbitration and is less expensive than other world class cities. And most important to many, Miami has the sun—it has been a terribly cold winter in the Northeast.
GlobeSt.com: How is it possible that as we enter into a new real estate cycle, we are seeing hotels trade at breaking-record prices?
Amaducci-Adams: The answer is simple—strong business metrics, a limited supply and a growing demand with access to significant amounts of cash.
This article is reprinted with permission from GlobeSt.com.